Pleasanton Weekly

News - February 3, 2012

Council, public weigh in on new police contract

Pension contributions will be raised, benefits for new hires reduced

by Jeb Bing

The Pleasanton City Council moved forward Tuesday night toward approving a new contract with the Pleasanton Police Officers' Association that requires members for the first time in a decade to contribute directly to their own retirement plan.

The new contract, which is expected to be approved by the council this Tuesday and take effect then, also will institute a so-called "two tier" plan that will reduce benefits for those hired after Feb. 7.

For those now on the police force, the new contract will require them to start paying directly into their CalPERS pension. For the last 10 years, the city has been paying the full 9% contribution based on an agreement in lieu of the police receiving salary adjustments.

Starting with the signing of the new contract, police will pay 3% of their salaries into the pension fund, followed by 6% on July 1, and then the full 9% starting July 1, 2013.

For new employees, the formula that allows police to retire at age 50 with 3% of their salary based on years of service would be moved to age 55. Based on the current formula, officers who have 30 years of service in law enforcement in California are eligible to receive 90% of their salary, based on their three highest years of earnings. Now eligible for this benefit at age 50, new employees would have to wait until age 55 for it to become effective.

Medical benefits for police hired after the new contract takes effect also are being reduced. Currently, police personnel who retire receive medical plan benefits for themselves and their spouse calculated on a percentage based on years of service with the city. The new agreement modifies that benefit from two parties to the employee only, and terminates when the employee becomes eligible for Medicare.

More than 30 of the 73 police officers now on the force sat together in the council chamber at Tuesday night's special City Council meeting, with many of them walking to the lectern to say they support the new contract.

Officer Dave Batoy, president of the police union, told the council that while police recognize their duty to help the city reduce its unfunded pension liability, the new contract will impose financial hardships on its members.

"This new contract will require officers to contribute roughly $1,000 of their pay each month and significantly alters health care benefits for those who now join the police force," he said.

Julie Yuan-Miu, Pleasanton's assistant city manager and Director of Administrative Services, who worked with City Manager Nelson Fialho in negotiating the new contract with police union representatives, said the new agreement will result in a savings to the city of approximately $2.4 million through the fiscal year 2013/14 budget.

Despite the police accord, Bart Hughes, a financial analyst who frequently talks at City Council meetings about the city's pension problems, said the new contract won't have any impact on Pleasanton's unfunded pension liability.

To address that liability, the council recently authorized setting aside $1 million from a surplus at the end of the last fiscal year to start paying down the deficit.

"But that won't help," Hughes said. "The unfunded liability which stood at stood at $121 million has grown to $137 million, so a lot more has to be done."

Fialho said now that the police contract has been settled, the council can turn its attention to the unfunded pension liability. He told council members Tuesday that he will be back with an action plan within the next few months.

The City Council will meet at 7 p.m. Tuesday to ratify the new police contract and discuss other issues. Council meetings are held at the Pleasanton Civic Center, 200 Old Bernal Ave.